FameEX Hot Topics | MicroStrategy Plans $500M Stock Sale to Acquire Additional Bitcoin

MicroStrategy plans a $500 million stock sale to fund additional Bitcoin acquisitions, reinforcing its commitment to BTC as a treasury reserve asset. MicroStrategy has announced its intention to offer $500 million in convertible senior notes due in 2032. The private offering to qualified institutional buyers will adhere to Rule 144A of the Securities Act 1933 and is subject to market conditions and other factors.

The notes will be unsecured, senior obligations of MicroStrategy, and will bear interest payable semi-annually in arrears on June 15 and December 15 each year, beginning on December 15, 2024. The notes will mature on June 15, 2032, unless earlier repurchased, redeemed, or converted in accordance with their terms. Despite market condition dependencies, this move aligns with MicroStrategy’s long-term goal of using BTC as its treasury reserve asset.

The firm also expects to grant initial purchasers of notes the option to buy an additional $75 million in aggregate principal amount of the notes. If MicroStrategy redeems fewer than all the outstanding notes, at least $75 million aggregate principal amount of notes must be outstanding and not subject to redemption as of the relevant redemption notice date.

The press release explained that the interest rate, initial conversion rate, and other terms of the notes will be determined at the time of pricing of the offering. MicroStrategy expects that the reference price used to calculate the initial conversion price for the notes will be the U.S. composite volume-weighted average price of MicroStrategy’s class A common stock from 9:30 am through 4:00 pm EDT on the date of pricing.

According to the press release, the notes would be offered and sold to qualified purchasers under Rule 144A of the Securities Act 1933. This means the convertible senior notes and any convertible shares of MicroStrategy’s class A common stock will not be officially registered under the Securities and Exchange Commission (SEC). Consequently, they cannot be sold or bought in public markets without meeting specific legal conditions. This initiative demonstrates MicroStrategy's ongoing strategy to strengthen its Bitcoin holdings, reflecting its firm belief in Bitcoin’s potential as a long-term store of value and a critical component of its corporate treasury strategy.

Disclaimer: The information provided in this section is for informational purposes only, doesn't represent any investment advice or FameEX's official view.